By John Dobberstein, Editor
After a few years of starts and stops, lawmakers have approved legislation to eliminates the state’s grocery tax, setting a record for the biggest single-year tax cut in the state’s history.
Oklahoma House Bill 1955 passed by a vote of 42-2 and the Senate sent the final bill on Thursday to Gov. Kevin Stitt. He expected to sign it Tuesday morning during a ceremony in the Capitol Blue Room.
“Today, we get to fulfill a promise to all four million Oklahomans and pass the largest single year tax cut in Oklahoma history. Cutting the grocery tax means relief for all Oklahomans,” Stitt said in a statement Friday. “I’m going to always fight for limited government and lower taxes, and I will still advocate to get us on path to zero income tax. This is a victory I’m excited to celebrate.”
Along with nixing the state’s 4.5% grocery tax, the bill will put a moratorium on the ability of cities and counties to raise their sales taxes on groceries until July 1, 2025. Voting against the bill was Sen. Mary Boren (D-Norman) and Senate Appropriations Chairman Roger Thompson (R-Okemah).
Senate President Pro Tem Greg Treat (R-Oklahoma City) said the measure would reduce state revenue by about $418 million a year and take effect in August. But it’s estimated to save shoppers about $105 a year – coming at a time when Americans are feeling the pinch from high-flying inflation and food prices.
Treat said the state has $1.2 billion in its Rainy Day fund, $4.1 million in the Revenue Stabilization fund and $2 billion in cash.
“Eliminating the state sales tax on groceries will bring much-needed tax relief to Oklahomans reeling from inflated prices, due to bad policies in Washington, D.C,” said State Sen. Julie Daniels (R-Bartlesville). “It was important to make this decision now so we can move ahead crafting the state budget as that must be done by the end of May.”
House Speaker Charles McCall (R-Atoka) thanked Treat Senate lawmakers for voting the legislation through to Stitt’s desk but noted the delayed vote cost Oklahomans an estimated additional $374 million in taxes and not putting the measure in place immediately will cost them another $200 million.
“The House has sent several tax cuts to the Senate over the last three years only to have them stall and not be heard. Thankfully this legislation has finally passed after 332 days of waiting,” McCall said. “Oklahomans are currently facing some of the worst inflation of the last three decades, and the Senate’s vote today means that help is finally on the way.”
This likely isn’t the end to discussion about tax cuts at the State Capitol. McCall said the House is wager to put a .25% income tax cut up for a vote in the future. “The House would still like to see a vote taken on the income tax cut legislation that was passed to the Senate in special session and will continue to explore every opportunity to lower the tax burden for all Oklahomans,” he said.
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